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Jeremy Sheppard Blog post by Jeremy Sheppard

Why should you consider Days On Market in your Location Research?

Hi I’m Jeremy Shepherd. Today I’m talking about Days on Market (DOM), which is another metric that we use here at Empower Wealth in our research.

 

When a property is advertised for sale, it’s considered “on the market”. The amount of time that a property will spend on the market is a useful metric for us to gauge supply and demand.

 

The faster the property sells, the higher demand is, relative to supply. And that’s what we’re interested in because supply and demand dictate price growth. If demand exceeds supply, you’ll find property prices rising. We use 90 days — roughly three months — as our benchmark.

If properties are selling faster than this, it means it’s a good market.

If properties are taking something like six months to sell, then this is probably a market in which supply exceeds demand.The Days on Market, therefore, is a very useful indicator for the potential for immediate capital growth.

But it’s not the only indicator, and it does suffer from some anomalies.

It might be that a real estate agent has been a little tardy in removing a property from its listing. It’s also possible that the vendor has gotten fed up with their existing agent and used another agent — this may make the Days on Market for that property appear smaller than what it really is.

 

So, if you’re interested in looking at some more metrics, in addition to the Days on Market, check out our research page.

Thanks very much for watching, and feel free to leave a comment below.

 

 

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